REPORT TO COUNCIL
SUBJECT
Title
Action on Monthly Financial Status and Investment Reports for September 2025 and Approve the Related Budget Amendments
Report
BACKGROUND
In compliance with the Charter of the City of Santa Clara and the adopted Investment Policy, the monthly financial report and monthly investment report for September 2025 are submitted for your information. The financial reviews, as of September 30, 2025, provide a year-to-date financial update to the City Council for fiscal year 2025/26. The analysis of the revenues collected and all expenditures measures the level of adherence to the established resource allocation plan and allows the City to monitor and project revenues and expenditures throughout the year.
The Budget incorporates the estimated revenues and planned expenditures for all funds. The attached Financial Status Reports provide the budget to actual revenue and expenditure summaries for the General Fund, Special Revenue Funds, Enterprise Funds and Internal Service Funds, as well as expenditure summaries for Capital Improvement Funds and Fund Reserve Balances. Any significant variances are explained in the reports.
In accordance with City Council Policy 051 - Donations to the City, a monthly activity and annual summary of donations received by department is included in these reports. Although the requirement of the policy is to report quarterly, the City will include this information monthly in the financial status report.
DISCUSSION
Monthly Financial Status Report (Attachment 1)
The attached Monthly Financial Status Report summarizes the City’s financial performance as of September 30, 2025 (Attachment 1). This report provided financial analysis for the General Fund, select Special Revenue Funds, Internal Service Funds, Enterprise Operating Funds, and Capital Improvement Funds.
Monthly Financial Status Report shows that General Fund revenues (excluding transfers) at 13.2% of the budget through September 2025. The revenue in some categories received through September account for activity that occurred in FY 2024/25 and those revenues are accrued back to that year. In other cases, such as property tax, most payments are scheduled to occur later in the fiscal year. While it is very early in the fiscal year and limited data is available, General Fund revenues are currently tracking within estimated levels. As shown in Monthly Financial Status Report, General Fund departmental expenditures were at 24.5% through September 2025 and are tracking at budgeted levels.
As shown in Monthly Financial Status Report, total revenues for Enterprise Funds (Electric, Water, Sewer, Cemetery, Solid Waste, and Water Recycling) were at 16.1% of the budget through September 30, 2025, while total expenses were at 22.4%.
In September, donations of $2,725 were received, bringing total donations to $25,342.
While the October 2025 UCLA Anderson Forecast assumes no recession, it continues to identify significant risks to the forecast during this period of unprecedented change and uncertainty. These include trade uncertainty, concerns about the credibility of our central bank and government statistical agencies, the continued feasibility of the AI boom, and the potential impacts of domestic political strife. The forecast assumes modestly elevated levels of inflation and unemployment and lower GDP growth that begins to recover in mid-2026.
In the third estimate for the second quarter 2025, the Gross Domestic Product (GDP) increased at an annual rate of 3.8%, following a GDP decrease of 0.6% in the first quarter 2025. On a national level, the unemployment rate changed little from 4.2% in July 2025 to 4.3% in August 2025. In August, the number of unemployed persons totaled 7.4 million, up 2% from July 2025. The California unemployment rate was 5.5% for both July 2025 and August 2025. The unadjusted unemployment rate in the San José-Sunnyvale-Santa Clara Metropolitan Statistical Area (MSA) was 4.7% in August 2025, down slightly from a revised 4.9% in July 2025, but unchanged from the August 2024 estimate of 4.7%. Due to the federal government shutdown, updated information is not available.
Staff will continue to closely monitor the General Fund revenues and the City’s overall financial performance.
Monthly Investment Report (Attachment 2)
All securities held by the City of Santa Clara as of September 30, 2025 were in compliance with the City’s Investment Policy Statement regarding current market strategy and long-term goals and objectives. All securities held are rated “A” or higher by two nationally recognized rating agencies. There is adequate cash flow and maturity of investments to meet the City’s needs for the next six months.
The City’s investment strategy for September 2025 was to invest funds not required to meet current obligations in securities listed in the prevailing Investment Policy Statement, with maturities not to exceed five years from the date of purchase. This strategy ensures safety of the City’s funds, provides liquidity to meet the City’s cash needs, and with a reasonable portfolio return of 4.13% in September.
The Monthly Investment Report also includes a Statement of Transactions, following the Investment Inventory, in accordance with California Municipal Treasurers Association investment policy guidelines.
ENVIRONMENTAL REVIEW
The actions being considered do not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to section 15378(b)(4) of Title 14 of the California Code of Regulations in that they are fiscal activities that do not involve any commitment to any specific project which may result in a potential significant physical impact on the environment.
FISCAL IMPACT
From time to time, adjustments to the budget are required to reflect new information, align budgets with actual revenues and expenses, and correct for inadvertent errors. The recommended budget adjustment is described in Attachment 3 and summarized below:
• General Fund - 1) in the Non-Departmental budget, reallocate funding from the separation payouts category to the materials, services, and supplies category to account for contractor costs for repairs to the City-owned property on Gianera Street, 2) recognize ambulance transport revenues and transfer those funds to the Vehicle Replacement Fund to replace a reserve fire engine, and 3) recognize Flexible Spending Account forfeiture funds and allocate those funds to the Human Resources Department to support employee health and wellness activities;
• Fire CUPA Fund - increase the materials, services, and supplies appropriation for office furniture and equipment costs associated with the three new positions added as part of the FY 2025/26 Adopted Operating Budget;
• Fire Development Services Fund - increase the materials, services, and supplies appropriation for office furniture and equipment costs associated with the three new positions added as part of the FY 2025/26 Adopted Operating Budget;
• Fire Operating Grant Trust Fund - recognize and appropriate Emergency Medical Services funding from the County to the Fire Department for the purchase of ambulance gurneys; and
• Vehicle Replacement Fund - recognize a transfer from the General Fund and appropriate the funding to replace a reserve fire engine.
COORDINATION
This report has been coordinated with the City Attorney’s Office.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation
1. Note and file the Monthly Financial Status Report and Monthly Investment Report for September 2025 as presented; and
2. Approve the FY 2025/26 budget amendments in the following funds (as detailed in the Fiscal Impact section of the staff report and Attachment 3 of the staff report):
a. General Fund: reallocates funding in the Non-Departmental appropriation from the separation payouts budget to the materials, services, and supplies budget, recognizes ambulance transport revenues and transfers the funds to the Vehicle Replacement Fund to replace a reserve fire engine, and recognizes Flexible Spending Account forfeiture funds and appropriates those funds to the Human Resources Department for employee health and wellness activities, with a net impact of $118,700;
b. Fire CUPA Fund: increases the materials, services, and supplies appropriation and decreases the unrestricted ending fund balance, with a net impact of $0;
c. Fire Development Services Fund: increases the materials, services, and supplies appropriation and decreases the unrestricted ending fund balance, with a net impact of $0;
d. Fire Operating Grant Trust Fund: recognizes County Emergency Medical Services funding and appropriates the funds to the Fire Department, with a net impact of $33,332; and
e. Vehicle Replacement Fund: recognizes a transfer from the General Fund and allocates funding to replace a reserve fire engine, with a net impact of $100,000.
(5 Votes required for items 2.a-e with further details provided in Attachment 3)
Staff
Reviewed by: Kenn Lee, Director of Finance
Approved by: Jovan D. Grogan, City Manager
ATTACHMENTS
1. Monthly Financial Status Report - September 2025
2. Monthly Investment Report - September 2025
3. FY 2025/26 Budget Amendments